AUSTRALIA DATA: Very Strong Private Capex To Support Q3 GDP Print
Q3 private capex volumes soared 6.4% q/q, the fastest since Q1 2012, and is setting up the 3 December GDP release for a solid increase at this stage. Inventory data is out 1 December and the net export and public demand contributions on 2 December. The jump in investment in the quarter was across both building and plant & machinery and was driven by a 11.5% q/q jump in the latter from spending on aircraft but also data centres. Annual growth rates are showing an investment recovery is currently taking place.
Australia real capital expenditur y/y%
- The increase in plant & machinery expenditure was the highest in almost 21 years. Similar growth rates have contributed around 0.3pp to GDP that quarter.
- Non-mining plant & machinery expenditure rose 13% q/q and mining +4.5% q/q. Investment in data centres was seen in the 40.7% q/q increase in information media & telecoms investment. The risk now is that there is payback for such a large jump in the subsequent quarters.
- Private investment in buildings rose 2.1% q/q, the fastest since Q2 2023, to be up 4.3% y/y. This could contribute around another 0.2pp. Non-mining was up 3.6% q/q while mining fell 0.4% q/q.
- Total Q3 capex was concentrated in non-mining (+8.6% q/q) with mining lagging (+0.9% q/q).
- Estimated capex for 2025-26 was revised 9.4% higher.
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